Figures from the Nordic Association of Marine Insurers (Cefor) indicate insured values have increased by 7.7% on average for ships that renewed their hull and machinery policy in the first six months of this year.
It follows on from a 4.9% increase in values in the previous year.
Cefor said the increase can be largely attributed to a boom in container shipping and higher newbuilding prices caused by cost inflation.
“The 2021 and 2022 increase is largely driven by a high demand for container vessels after the demand for consumer goods bounced back in 2021. For new vessels, the increase in steel prices may have contributed to an inflation of newbuilding prices and vessel values,” it said.
It expects general inflation will start to hit claims costs, although for now there seems to be little impact.
“Given the current macroeconomic environment and strong increase in steel prices and other factors driving inflation, it seems only a matter of time until this also will impact repair costs,” Cefor said.
While insured values are increasing, claims are falling.
In the first half, there were no claims over $30m in value and only four claims in excess of $10m. Among the major losses were a number of container ship fires.
In the first half of 2021, there were eight claims over $10m.
Claims frequency, which took a large dip in 2020 because of reduced traffic linked to the pandemic, rebounded in 2021 and 2022.
Major losses
While claims frequency is increasing, it has not yet hit pre-pandemic levels.
The resumption of normal activity in the high-value container ship and cruise ship sectors indicates the industry could be in store for a major loss.
“After some years with low major claims impact, one would, from a statistical perspective, expect some increase in the number of major losses going forward,” the association said.
Cefor’s figures are taken from its member companies, which include some of the industry’s largest insurers, such as Gard and the Norwegian Hull Club.
